The Online Library of Liberty

A project of Liberty Fund, Inc.

• Preface.
• Conversation I.: Introduction.
• Conversation II.: Introduction — Continued.
• Conversation III.: On Property.
• Conversation IV.: On Property— Continued.
• Conversation V.: On the Division of Labour.
• Conversation VI.: On Capital.
• Conversation VII.: On Capital — Continued.
• Conversation VIII.: On Wages and Population.
• Conversation IX.: On Wages and Population. Continued.
• Conversation X.: On the Condition of the Poor.
• Conversation XI.: On Revenue.
• Conversation XII.: On Revenue Derived From Property In Land.
• Conversation XIII.: On Revenue Derived From the Cultivation of Land.
• Conversation XIV.: On the Revenue of Those Who Do Not Employ Their Capital Themselves.
• Conversation XV.: On Value and Price.
• Conversation XVI.: On Money.
• Conversation XVII.: Subject of Money Continued.
• Conversation XVIII.: On Commerce.
• Conversation XIX.: On Foreign Trade.
• Conversation XX.: Continuation of Foreign Trade.
• Conversation XXI.: Subject of Foreign Trade Continued.
• Conversation XXII.: On Expenditure.

CONVERSATION XXII.

ON EXPENDITURE.

mrs. b.

I trust that you now understand both the manner in which capital is accumulated, and the various modes of employing it to produce a revenue. It remains for us to examine how this revenue may be disposed of.

caroline.

I have already learnt that revenue may either be spent or accumulated and converted into capital; and that the more a man economises for the latter purpose, the richer he becomes.

mrs. b.

This observation is equally applicable to the capital of a country, which may be augmented by industry and frugality, or diminished by prodigality.

caroline.

The capital of a country, I think you said, consisted of the capital of its inhabitants taken collectively?

mrs. b.

It does; but you must be careful not to estimate the revenue of a country in the same manner, for it would lead to very erroneous calculations. Let us, for instance, suppose my income to be 10,000l. a-year, and that I pay 500l. a-year for the rent of my house — it is plain that this 500l. constitutes a portion of the income of my landlord; and since therefore the same property, by being transferred from one to another, may successively form the income of several individuals, the revenue of the country cannot be estimated by the aggregate income of the people.

caroline.

And does not the same reasoning apply to the expenditure of a country; since the 500l. a-year which you spend in house-rent will be afterwards spent by your landlord in some other manner?

mrs. b.

True, because spending money is but exchanging one thing against another of equal value; — it is giving, for instance, one shilling in exchange for a loaf of bread, five guineas in exchange for a coat; instead of a shilling we are possessed of a loaf of bread; instead of five guineas, of a coat; we are therefore as rich before as after these purchases are made.

caroline.

If so, how is it that we are impoverished by spending money?

mrs. b.

It is not by purchasing, but by consuming the things we have purchased, that we are impoverished. When we have eaten the bread and worn out the coat, we are the poorer by five guineas and a shilling than we were before.

A baker is not poorer for purchasing a hundred sacks of flour, nor a clothier for buying a hundred pieces of cloth, because they do not consume these commodities.

When a man purchases commodities with a view of re-selling them, he is a dealer in such commodities, and it is capital which he lays out. But when he purchases commodities for the purpose of using and consuming them, it is called expenditure. Expenditure, therefore, always implies consumption.

caroline.

I understand the difference perfectly. The one lays out capital with the view of re-selling his goods with profit. The other spends money with the view of consuming the goods with loss; — that is to say, the loss of the value of the goods he consumes.

mrs. b.

Just so. Thus though the sum of money you spend will serve the purpose of transferring commodities successively from one person to another, yet the commodities themselves can be consumed but once.

Therefore the consumption of a country may, like its capital, be estimated by the aggregate consumption of its inhabitants; and the great question relative to the prosperity of the country, is, how far that consumption takes place productively, and how far unproductively.

caroline.

That certainly is a very important point; for in the former case it increases wealth, in the latter it destroys it.

Yet, Mrs. B., supposing a man were so prodigal as to spend not only the whole of his income, but even the capital itself, provided that it were spent in the maintenance of productive labourers, though it would ruin the individual, I do not conceive that it would injure the country; for whether a man lay out his capital in the maintenance of productive labourers with a view to profit, or whether he spend it in purchasing the fruits of their industry for the purpose of enjoyment, I can perceive no difference relative to the country; in both cases an equal number of people would be employed, and consequently an equal quantity of wealth produced. If his money went to the maintenance of unproductive labourers, and nothing substantial was had in exchange, that would alter the case; but if it is spent amongst tradesmen, who will furnish him with articles for his enjoyment, such as magnificent apparel, splendid equipages, sumptuous entertainments, he will then replace the capital which those tradesmen have been consuming, in order to produce these commodities, which capital will again be usefully employed in producing more.

mrs. b.

That is very true; and so far the prodigal has done no harm. In spending his capital amongst tradesmen, he has exchanged his various commodities for others of equal value, and the same quantity of capital exists as before the exchange took place; but what is the prodigal to do with the new stock that he has acquired?

caroline.

It will be applied to the gratification of his desires: he will regale with his friends at sumptuous feasts, he will use the equipages, and clothe himself and his servants in the rich apparel.

mrs. b.

Then he and his friends will consume amongst servants and dependants, in fetes and splendid entertainments, what the tradesmen furnished him with, instead of that which he gave in exchange for it; and as much capital will be lost to himself and to the community in the one case as in the other. The spending of capital is a sterile consumption of it, whilst its employment is a reproductive consumption.

caroline.

But if money were not thus spent, what would the tradesman do with the luxuries which he had prepared for the purpose of supplying the demand of persons who spend in order to enjoy?

mrs. b.

Such tradesmen would certainly find less employment; but you would not thence conclude that the community would be injured. You have already seen that capital cannot produce revenue unless it be consumed; if it be consumed by industrious persons, who work whilst they are consuming it, something of superior value will be produced, and that product, whatever it may be, will be exchanged against other productions; it will be distributed amongst another order of tradesmen, and will afford precisely the same amount of encouragement, though of a different kind. Whatever is saved from the extravagant consumption of the rich, is a stock to contribute to the comforts of the middling and lower ranks of society.

caroline.

Yet how often has it been said that a generous and liberal expenditure, however injurious to the individual, was a source from which the middling and lower classes drew their principal means of subsistence?

mrs. b.

There is not a more fatal delusion in political economy. By such wanton extravagance as we have been describing, the capital, which should annually furnish a subsistence to labourers, is wasted and destroyed, and the industrious are reduced to idleness and want. They are covered with rags, because the prodigal has clothed himself in gorgeous apparel; they wander without a home, because the prodigal has erected a palace; they must starve, because the wealth that should have fed them has been squandered in sumptuous feasts.

It is easy to comprehend that the prevalence of such conduct in a state must be followed by the gradual decay of its wealth and population.

caroline.

This is a most painful reflection; but on the other hand it would not, I suppose, be possible for a country to make any progress in wealth by which the poor were not more or less benefitted?

mrs. b.

Certainly not, if no undue influence is exercised, and things are allowed to follow their natural course. Where property is secure, there is a general tendency to accumulation of capital. The great majority are governed by good sense and prudence, and their efforts to save and better their condition more than counterbalance the occasional loss that arises from the extravagance of spendthrifts. Besides, if expenditure were directed in too large a proportion towards the production of mere luxuries, and the number of persons employed in producing them were to be increased without at the same time augmenting the number of persons employed in producing articles of subsistence, the same quantity of provisions must be divided amongst a greater number of consumers; and as provisions, in consequence of being more scarce, would increase in price, the profits of agriculture would become so great, that the capital which had been applied to the production of luxuries would flow to the more advantageous employment of agriculture, and thus the natural distribution of capital would be restored.

caroline.

The more I hear on this subject, and the better I understand it, the greater is my admiration of that wise and beneficent arrangement which has so closely interwoven the interests of all classes of men!

mrs. b.

We are accustomed to trace the hand of Providence chiefly in the natural world, but it is no less conspicuous in moral life, and cannot be more strongly exemplified than in that order of things which renders it essential to the interests of the rich not to turn the labour of the poor to the production of superfluities until they have provided an ample supply of the necessaries of life.

But these wise dispensations are often in a great measure subverted by the folly and ignorance of man. An injudicious interference of government, for instance, may give peculiar advantages to the employment of capital in one particular branch of industry, to the prejudice of others, and thus destroy that natural and useful distribution of it, which is so essential to the prosperity of the community.

caroline.

If ever the legislature could interfere with advantage, I should think it would be in some regulations respecting expenditure. I should be strongly tempted to restrain the use of luxuries, in order to induce the owners of capital to employ it in agriculture, and such homely manufactures as are suited to the consumption of the poor: such a measure could not fail to produce a more equal distribution of the comforts of life.

mrs. b.

Sumptuary laws have been instituted with that view in many countries. But after all we have said of the benefits resulting from the natural distribution of capital when unrestrained and uninfluenced by political regulations, I confess that I am surprised at your wishing to compel people to employ it in one way rather than in another.

caroline.

But if that one way should prove the right way?

mrs. b.

Then capital will follow that direction by its natural impulse, without requiring any foreign aid. Be assured that the only right way is to leave the use of capital to the care of those to whom it belongs; they will be the most likely to discover in what line it can be employed to the greatest advantage.

caroline.

Of their own advantage they are no doubt the best judges: but are you sure that they will be equally attentive to the advantage of the poor? Sumptuary laws appear to me to afford peculiar encouragement to the production of the necessaries of life. But the principal use of sumptuary laws would be to repress the expenditure of revenue. And since it is so desirable that capital should not be dissipated, surely the same principles will apply to revenue; would it not be advantageous to save great part of that also, in order to convert it into capital?

mrs. b.

Capital, you know, has arisen solely from savings from revenue; but you are aware that there must be a limit to such savings.

caroline.

Certainly there is a limit, because we could not live without consuming some part of it; but the less we consume, and the more we save, the better.

mrs. b.

That is pushing the principle too far: wealth is accumulated for the purpose of enjoyment; and if by a liberal though prudent expenditure, social affections are cultivated, and the happiness of mankind promoted and extended, I see no reason why we should be debarred from indulging in some of the best feelings of our nature.

The two extremes of parsimony and prodigality are perhaps equally pernicious: the one as destructive of the social and benevolent affections, the other as wasting the provision which nature has destined for the maintenance and employment of the poor.

But there is another point of view in which sumptuary laws have a dangerous tendency. By diminishing objects of desire you run some risk of giving a general check to industry.

Tell me why do the rich employ the poor?

caroline.

In order to derive an income from the profits of their labour.

mrs. b.

And what use do the rich make of this income?

caroline.

They either spend the whole, or they economise part in order to augment their capital.

mrs. b.

But why should they be desirous of increasing their capital?

caroline.

There are so many reasons for wishing to be rich, that I scarcely know how to enumerate them. The pride of wealth is a motive with some men, the love of independence with others; the apprehension of future reverses incites a third to accumulate; the wish to increase his means of doing good stimulates the industry of another; the desire of providing for a family, and leaving them in affluence, is a powerful inducement with many; but the ambition of improving their situation in life, and of increasing their enjoyments by a more liberal expenditure, is, I think, the most general, and perhaps the strongest of all the motives for accumulating riches.

mrs. b.

If, then, laws be enacted which restrain a man from spending any part of his income in luxuries, you take away one of his motives for wishing to augment his capital: and a growing capital is, you know, an increase of subsistence for the poor.

caroline.

I would wish to prohibit only that excess of luxury which you have censured as pernicious.

mrs. b.

It is extremely difficult to draw the line between necessaries and luxuries; these form a scale which comprehends all the various comforts and conveniences of life, the graduations of which are too numerous and too minute to be distinct. We have considered as necessaries whatever the rate of wages of the lowest ranks of people have enabled them to command; they would consider as luxuries whatever they have not been accustomed to enjoy; though when they can afford it there is no excess. Excess, I conceive, depends not so much on the quantity or nature of the luxury, as upon its relative proportion to the means of the individual. A daily meal of meat is an excess of luxury to the family of a common labourer, because they are not used to it, and their wages will not enable them to command it; whilst a table abounding with expensive delicacies can scarcely be called excess of luxury to a man whose income is so large that such gratifications do not prevent his making considerable savings.

caroline.

Since, then, it is impossible to define what are and what are not luxuries, no general line of prohibition can be drawn. Yet it is surely much to be regretted, that excessive expenditure, so mischievous in its effects, should neither be restrained nor punished.

mrs. b.

The ruin which extravagance entails on the prodigal is his natural punishment, and serves as a warning to deter others from similar imprudence. Any attempt to prevent such partial evil by sumptuary laws, would, generally, tend to depress the efforts of industry. The desire of increasing our enjoyments, and of improving our situation in life, as it is one of the strongest sentiments implanted in our nature, so I conceive it to be essentially conducive to the general welfare. It is the active zeal of each individual exerted in his own cause, which, in the aggregate, gives an impulse to the progressive improvement of the world at large. The desire of bettering his condition is justly considered as a laudable disposition in a poor man, and it is a feeling dangerous to repress in any classes of society.

caroline.

• —— “The man of wealth and pride
• Takes up a space that many poor supply’d;
• Space for his lake, his park’s extensive bounds;
• Space for his horses, equipage, and hounds;
• The robe that wraps his limbs in silken sloth,
• Has robb’d the neighbouring fields of half their growth;
• His seat, where solitary sports are seen,
• Indignant spurns the cottage from the green”

What can you reply to these beautiful lines, Mrs. B.? I fear they are but too faithful a representation of the state of society.

mrs. b.

I must first enquire whether this man of wealth and pride either spends or produces capital in order to procure these gratifications. If the former, he deserves all the censure we have bestowed upon the spendthrift. If the latter, his wealth may possibly be more increased by his industry than diminished by his luxury.

caroline.

In all probability he does neither; but being possessed of a considerable property, he lives upon his income; and such an expensive style of living must greatly diminish, if not wholly absorb, what he might otherwise economise.

mrs. b.

Still I cannot approve of compulsory measures to lessen his expenses. If it be desirable to stimulate and encourage the industry of man, and induce him to accumulate wealth, he must be at full liberty to dispose of it according to his inclinations. It is unquestionably true, that unless the rich impoverish themselves by spending their capital, they cannot impoverish their country.

caroline.

That is not enough; the question is, what are the best means of enriching their country?

mrs. b.

One man sits down contented with his little property; brings up his children with humble views and desires, and every year lays by something to provide for their future support in life.

Another of a more ambitious character rises early and labours hard, exerting every faculty of his mind to turn his capital to the best account; he likewise makes savings from his income, but they do not prevent his growing wealth from enabling him to spend more liberally, and enjoy more freely; and none of his enjoyments is more heartfelt, than that of having raised his family in the world by the exertions of his industry.

caroline.

Every man who is striving to acquire wealth is certainly more or less actuated by the prospects of the various enjoyments which he hopes his increasing income will enable him to command. One wishes to become rich enough to marry; another to keep a carriage, or a country-house; a third to be able to settle his children respectably in the world.

mrs. b.

Such motives are strong incitements both to industry and frugality; and these useful habits often remain when the cause which gave rise to them no longer exists; it is far from uncommon to see men retain the taste for accumulating long after they have lost the inclination for spending.

Dr. Adam Smith observes, that before the introduction of refined luxuries, the English nobles had no other means of spending their wealth, than by maintaining in their houses a train of dependants, either in a state of absolute idleness, or whose only business was to indulge the follies or flatter the vanity of their patron; and this is in a great measure the case in Russia, Poland, and several other parts of Europe, even at the present day. We find that the consumption of provisions by the household of an English nobleman some centuries ago was perhaps a hundred times greater than it is at present. But you must not thence infer that the estate, which maintained such numerous retainers, produces less now than it did in those times; on the contrary, it is perhaps as much increased as the consumption of the household is diminished. The difference is, that the produce, instead of supporting a number of lazy dependants, maintains, probably a hundred times that number of industrious independent workmen, part of whom are employed in raising the produce of the estate, and part in supplying the nobleman with all the luxuries he requires: it was to obtain these luxuries, that he dismissed his train of dependants, that he improved the culture of his land, and that, whilst studying only the gratification of his wishes, he contributed so essentially to the welfare of his country.

Here is a passage in Paley’s Political Philosophy on the subject of luxury, extremely worth your attention:—

“It appears that the business of one half of mankind is to set the other half at work; that is, to provide articles, which, by tempting the desires, may stimulate the industry, and call forth the activity of those upon the exertion of whose industry, and the application of whose faculties, the production of human provision depends. It signifies nothing to the main purpose of trade how superfluous the articles which it furnishes are, whether the want of them be real or imaginary; whether it be founded in nature or in opinion, in fashion, habit, or emulation; it is enough that they be actually desired and sought after. Flourishing cities are raised and supported by trading in tobacco: populous towns subsist by the manufactory of ribbons. A watch may be a very unnecessary appendage to the dress of a peasant, yet if the peasant will till the ground in order to obtain a watch, the true design of trade is answered; and the watchmaker, whilst he polishes the case, and files the wheels of his machine, is contributing to the production of corn, as effectually, though not so directly, as if he handled the spade or the plough. If the fisherman will ply his nets, or the mariner fetch rice from foreign countries, in order to procure the indulgence of the use of tobacco, the market is supplied with two important articles of provision by the instrumentality of a merchandise which has no other apparent use than the gratification of a vitiated palate.”

caroline.

This reminds me of an anecdote in Dr. Franklin’s works. He describes the admiration which was excited by a new cap worn at church by one of the young girls of Cape May. This piece of finery had come from Philadelphia; and with a view of obtaining similar ornaments, the young girls had all set to knitting worsted mittens, an article in request at Philadelphia, the sale of which enabled them to gratify their wishes.

mrs. b.

We often hear the poor reproached for aiming at things above their situation; but I own that I delight in seeing them strive to ornament their cottages, to raise a few flowers amongst the nutritious vegetables in their gardens, to deck their room, though it be but with rows of damaged china cups, and plates, or a few gaudy prints; it shows a desire of creditable appearance, and of aiming at something beyond the bare means of subsistence.

caroline.

The desire of improving their condition is not, however, in all cases a sufficient motive to rouse the industry of the lower classes. I once knew an easy indulgent landed proprietor, who having no ambition to increase his income could never be induced to raise his rents; his tenants, finding that they could pay their landlord and maintain their families as well as their neighbours, with much less labour, neglected their farms, and became so idle and disorderly, that the estate was the least productive of any in the country.

mrs. b.

The country thus suffered from the well-meant, but ill-judged indulgence of this landlord.

caroline.

But why was not the industry of these tenants stimulated by the desire of raising themselves in the world, which the forbearance of their landlord enabled them so easily to do?

mrs. b.

In the course of time it probably would have had that effect; but when uneducated men obtain an increase of wealth, the first use they generally make of it is to procure indulgences and exemption from labour; it is only after becoming sensible that idleness leads them back to poverty, that they think of turning their wealth to better account. Well-educated people seldom require the experience of so severe a lesson, but amongst the lower classes it is not uncommon to find that a great, and especially a sudden accession of riches, terminates in ruin.

caroline.

There are frequently instances of poor people being ultimately ruined by a high prize in the lottery.

mrs. b.

And the lower the state of ignorance and degradation of mind of the poor man who gains the prize, the more certain is his ruin. The different state of improvement of the lower classes in England, in Scotland, and in Ireland, are strongly exemplified in this respect. If you were to give a guinea to a Scotch peasant, he would deliberately consider how he could turn it to the best account; he would, perhaps, buy a pig, or something which would bring a future profit. An English peasant is not quite so long sighted, yet he would contrive to derive some substantial advantages from the gift of a guinea; he would probably lay it out in repairing his cottage, or in purchasing some new clothes for his children. But the Irishman, whose joy would be the greatest of the three at such an unexpected acquisition of wealth, would in all likelihood spend the whole of it in drinking whisky with his friends, and thus disable himself for the labour of the following day.

caroline.

And do you suppose that a sudden and considerable increase of wages would be attended with mischievous effects to the labouring poor?

mrs. b.

In the first instance it probably would. In manufactures it is commonly found that an accidental increase of wages, arising from a sudden demand for workmen, is productive of intemperance and disorderly conduct; and this has been urged as a general objection to high wages; but this bad effect seldom takes place unless the augmentation be sudden and unlooked for, and it discontinues when the high wages become regularly established. You may almost consider it as certain, that uneducated men will derive no advantage from such an augmentation of income as raises them suddenly above their accustomed habits of life. The beneficial effects I have described to you in one of our preceding conversations as arising from increasing wealth and demand for labour, must be gradual in order to prove useful to the lower classes.

caroline.

All that you have said reconciles me, in a great measure, to the inequality of the distribution of wealth; for it proves that, however great a man’s possessions may be, it is decidedly advantageous to the country that he should still endeavour to augment them. Formerly I imagined that whatever addition was made to the wealth of the rich was so much subtracted from the pittance of the poor, but now I see that it is, on the contrary, an addition to the general stock of wealth of the country, by which the poor benefit equally with the rich.

mrs. b.

Yes; every accession of wealth to a country must have not only employed labourers to produce it, but will in future employ other labourers in order that the proprietor may derive an income from it. For every increase of capital is the result of a past and the cause of a future augmentation of produce; therefore whatever a man’s property may be, he should be encouraged to improve it. I will read you an eloquent passage in Bentham’s Théorie de la Législation on the subject of luxury.

“L’attrait du plaisir, la succession des besoins, le desir actif d’ajouter au bien étre, produiront sans cesse, sous le régime de la sûreté, de nouveaux efforts vers de nouvelles acquisitions. Les besoins, les jouissances, ces agens universels de la société, après avoir fait éclore les premières gerbes de blés, élèveront peu-à-peu les magazins de l’abondance toujours croissans et jamais remplis. Les desirs s’étendent avec les moyens; l’horizon s’aggrandit, à mesure qu’on s’avance, et chaque besoin nouveau, également accompagné de sa peine et de son plaisir, devient un nouveau principe d’action; l’opulence qui n’est qu’un terme comparatif n’arrête pas même ce mouvement, une fois qu’il est imprimé; au contraire, plus on opère en grand, plus la recompense est grande, et par conséquent plus est grande aussi la force du motif qui anime l’homme au travail.

“On a vu que l’abondance se forme peu-à-peu par l’opération continue des mêmes causes qui ont produit la subsistance. Il n’y a donc point d’opposition entre ces deux buts. Au contraire, plus l’abondance augmente, plus on est sur de la subsistance. Ceux qui blâment l’abondance sous le nom de luxe n’ont jamais saisi cette considération.

“Les intempéries, les guerres, les accidens de toute espèce attaquent souvent le fond de la subsistance; en sorte qu’une societé, qui n’auroit pas de superflu et même beaucoup de superflu seroit sujette à manquer souvent du necéssaire; c’est ce qu’on voit chez les peuples sauvages. C’est ce qu’on a vu fréquemment chez toutes les nations dans les tems de l’antique pauvreté. C’est ce qui arrive encore de nos jours dans les pays peu favorisés de la nature, tels que la Suéde, et dans ceux où le gouvernement contrarie les opérations du commerce au lieu de se borner à le protéger. Mais les pays où le luxe abonde et où l’administration est éclairée, sont à l’abri de la famine. Telle est l’heureuse situation de l’Angleterre. Des manufactures de luxe deviennent des bureaux d’assurances contre la disette. Une fabrique de bierre ou d’amidon se convertira en moyen de subsistance. Que de fois n’a-t-on pas déclamé contre les chevaux et les chiens comme dévorant la subsistance des hommes! Ces profonds politiques ne s’élèvent que d’un degré au dessus de ces apôtres du désintéressement, qui, pour ramener l’abondance des blés courent incendier les magazins.”

caroline.

We had not yet considered luxury under this point of view; I confess that I was of the opinion of those who thought that dogs and horses devoured the subsistence of man, but I am much better pleased to think that the food which luxury raises for the nourishment of those animals may, in case of necessity, become nourishment for the human species; and, if a famine should take place, even the animals themselves would afford a resource.

mrs. b.

Hair-powder we may consider as a kind of granary for the preservation of wheat, for though the powder would not, unless in cases of very great urgency, be converted into food, the quantity of corn annually grown for the purpose of making hair-powder would, during a moderate scarcity, find its way more readily to the baker’s than to the perfumer’s shop.

caroline.

And pray, Mrs. B., what do you think of the luxury of the Romans? We read in Pliny of a Roman lady who was dressed in jewels to the amount of 300,000l. I recollect, also, an account of a dish of fish having cost 64l.

mrs. b.

These are but trifling instances of profusion, in comparison of some others related of the Romans. Marc Antony expended 60,000l. in an entertainment given to Cleopatra. And the supper of Heliogabalus cost 6000l. every night. But nothing can be said in apology for the luxuries of the Romans; they were peculiarly objectionable, because their wealth did not proceed from industry, but from plunder. Their extravagance and profusion, therefore, far from being a spur to industry, acted in a contrary direction; it encouraged the love of rapine in themselves, whilst it depressed the spirit of industry in the countries subject to their power, by destroying the strongest of all inducements to labour, the security of property. It has been well observed by Macpherson, that “the luxuries of the Romans cannot be considered as the summit of a general scale of prosperity; it was a scale graduated but by one division, which separated immense wealth and power from abject slavery, wretchedness, and want.”

In considering the advantages to be derived from luxury, we must, however, carefully remember, that it acts in a twofold manner; whilst on the one hand it encourages industry, on the other it increases expenditure; so far as its productive powers prevail over its prodigal effects, it is beneficial to mankind; but in the contrary case it becomes an evil, and when it encroaches on capital we have seen that it is an evil of the greatest magnitude.

The grand object to be kept in view in order to promote the general prosperity of the country, is the increase of capital. But it is not in the power of the legislature to promote this end in any other way than by providing for the security of property; any attempts to interfere either with the disposal of capital or with the nature and extent of expenditure, are equally discouraging to industry.

caroline.

Whoever, I conceive, augments his capital by savings from his income, increases the general stock of subsistence for the labouring classes; whilst he who spends part of his capital diminishes that stock of subsistence, and consequently the means of employing the labouring classes in its reproduction.

Every man ought, therefore, to consider it as a moral duty, independently of his private interest, to keep his expenditure so far within the limits of his income that he may be enabled every year to make some addition to his capital.

mrs. b.

And the question what that addition should be, must depend entirely upon the extent of his income, and his motives for expenditure. We can only point out illiberal parsimony and extravagant prodigality as extremes to be avoided; there are so many gradations in the scale between them, that every man must draw the line for himself, according to the dictates of his good sense and his conscience, and in so doing should consult, perhaps, the moral philosopher as well as the political economist. He who has a large family to maintain and establish in the world, though more strict economy be required of him, cannot be expected to make savings equal to those of a man of a similar income, who has not the same calls for expenditure.

But however large a man’s income may be, he has no apology for neglect of economy. Economy is a virtue incumbent on all: a rich man may have sufficient motives to authorise a liberal expenditure, but he can have none for negligence and waste; and however immaterial to himself the loss which waste occasions, he should consider it as so much taken from that fund which provides maintenance and employment for the poor.

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